A 12-point increase in NPS has been shown to lead to a doubling in company growth rate
their competitors in most industries by an average of 250 per cent. In addition, a 12-point increase in NPS has been shown to lead to a doubling in company growth rate. Put simply, promoters stay longer
(increasing membership fees and saving on marketing and promotion costs), spend more (increasing secondary spend) as they are interested in your company’s services and products, and promote your brand (increasing non- incentive based referral, with referrals from promoters themselves more likely to become promoters). They are also less price-sensitive
than others, believing they are receiving good value for money, and complain less frequently than detractors, tying up less customer service time.
good profits, bad profits NPS is also based on the concept of
‘good profits’ and ‘bad profits’. Good profits are medium- to long-term and sustainable, delivering long-term growth and profitability. Bad profits are short-term and can only sustain a business for a relatively short period of time. Just measuring customer satisfaction won’t distinguish between the two, but NPS will. Selling the wrong product or service
to a customer and then under-delivering on the service promise leads to a high percentage of detractors in your customer base, delivering bad profi ts.
“The problem we have is that almost all health and fi tness operators survive off bad profi ts,” says Alister Rollins, CEO of The Retention People (TRP). “With half of all members stopping using a facility after just a few months, yet still paying, almost all profi ts from these customers is bad and unsustainable. It’s no wonder we have a retention problem! NPS gives this sector a method of gaining visibility of the problem and a structure to improve, which in turn will see the growth of the sector again.”
first national nps survey With its emphasis on personal customer service and the importance of word of mouth marketing, referrals and recommendations, NPS has great relevance to the health and fitness sector; indeed, a number of companies
november/december 2010 © cybertrek 2010
already use it, or something similar, as their key service metric. Customer insight specialist Leisure-
net has therefore teamed up with TRP to formally launch NPS into the sector, running the industry’s fi rst national survey and benchmarking service – a survey which, in the long run, will enable operators to benchmark their customers’ satisfaction and loyalty not only against other operators, but also against fi rms outside the leisure sector. The survey is ongoing but currently
involves more than 50 public and private operators, carrying out the simple online survey among more than 50,000 members across 300-plus sites. Initial results outlined last month have revealed an incredible range of NPS scores, with the lowest operator scoring just 4 per cent and the best scoring 76 per cent. The current average is 25 per cent – very low in comparison to other industries – which highlights the need for our sector to improve its focus on service. The average scores for the whole sector are shown in the table on the opposite page.
Key reasons that people gave for being promoters were: • Helped me to achieve results in terms of my health, fi tness or weight • Friendly, supportive and knowledgeable staff • Great relationships with other members/customers
Key reasons that people gave for being detractors were: • Staff not interested in helping me • Staff not friendly and do not talk to me • I haven’t achieved what I wanted to • Lack of basic cleanliness and working equipment
fitness & the nps Steve Philpott, CEO of DC Leisure, certainly thinks NPS has great potential in the health and fitness sector. “The sector needs powerful customer
service matrices that can be benchmarked both internally and externally against other sectors, and we are very happy to be pioneers in embracing this powerful customer measure,” he explains. “As an ex-marketeer, I’ve been fascinated with the NPS ever since I was introduced to the concept two or three years ago, and
Keep your equipment in working order: if it’s not, it will lead to higher numbers of detractors
I’m really pleased that we’re now using it as the key metric in DC Leisure’s customer KPIs.” One of the key problems facing our
sector over the last 20 years has been our reliance on bad profi ts at clubs/ centres, with too high a percentage of detractors. If we were to concentrate on turning more of our members into promoters, putting this objective at the centre of everything we do – from marketing and sales, through recruitment and training of staff, to service delivery processes and systems – this could create a tipping point, bringing about a vital change in our businesses from bad to good profi ts.
Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld. Companies must obtain a licence to use NPS, as it is a protected process and registered trademark; LeisureNet and The Retention People can help businesses to obtain this licence.
healthclub@leisuremedia.com mike hill
Read Health Club Management online at
healthclubmanagement.co.uk/digital 69
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